Today’s Daily Alert brings a strong new momentum stock from Cabot Top Ten Trader.
“Like many recent stocks featured in Cabot Top Ten Trader, Popular, Inc. (BPOP, $29) has gained momentum from a strong quarterly report. But this Puerto Rican bank, which was founded in 1893, is also riding the rising tide of recovery in the global financial sector. Popular is the holding company for Banco Popular de Puerto Rico — 192 branches and 633 ATMs in Puerto Rico and the Virgin Islands — and a community banking franchise in the U.S. with 93 branches in New York, California, Illinois, New Jersey and California.
“Banco Popular is the largest bank in Puerto Rico in both assets ($28 billion) and deposits, and ranks 36th by assets among U.S. bank holding companies. A specialization in development loans for commercial real estate has been a big contributor to recent results. The quarterly report on January 24 showed a major reduction in non-performing loans and an increase in capital ratios. Investors were impressed by the decrease in bad loans and the company’s 710% jump in earnings. Popular is the dominant bank in Puerto Rico and is growing aggressively in the U.S. And that, plus the rebound in the global financial sector, is driving investor interest.
Technical Analysis
“BPOP pulled out of a rough patch in 2012, soaring from 13 in July to 23 in January 2013. That great run was put in the shade by the stock’s reaction to earnings on January 24, which gapped the stock up to 26 in one day on huge volume and has been followed up with continuing gains that have produced a run to near 29. The 25-day moving average is rising fast, but it still back below 25, which may portend a consolidation or correction in the near future. If you like the story, you should wait for a period of flat trading or a pullback of a point or so. Suggested Buy Range 26-28. (Cabot’s buy range is valid for two weeks.)”
- Michael Cintolo, Cabot Top Ten Trader, February 11, 2013